Southwestern Energy greenshoe brings 6.25% mandatory convertible preferreds to $1.73 billion

By Susanna Moon

Chicago, Jan. 16 – Southwestern Energy Co. underwriters fully exercised the over-allotment option for 4.5 million shares of 6.25% series B mandatory convertible preferred stock, bringing the total deal size to $1,725,000,000.

In all, the company sold 34.5 million depositary shares, representing 1,455,000 shares of the convertible preferreds, according to a company press release.

As previously reported, the company priced $1.5 billion of the convertible preferreds on Jan. 15 with a $225 million over-allotment option.

The issuer also sold a concurrent $600 million offering of common stock at $23.00 per common share.

The convertible preferreds were issued as depositary shares representing a 1/20th interest.

BofA Merrill Lynch, Citigroup Global Markets Inc., J.P. Morgan Securities LLC, Wells Fargo Securities LLC and BNP Paribas Securities Corp. were the bookrunning managers.

The initial price of the $50-par shares was $23.00 apiece, representing a liquidation preference of $1,000 divided by the maximum conversion rate of 43.4782 common shares.

The threshold appreciation price is $27.025, a 17.5% premium over the initial price dividend by the minimum conversion rate of 37.0028 shares.

The floor price is $8.05, or approximately 35% of the initial price.

The securities are mandatorily convertible on Jan. 15, 2018. Holders can convert their shares prior to that date at the minimum conversion rate.

Additionally, the holders can convert their holdings upon a fundamental change.

Dividends will be paid on a cumulative basis on the 15th day of January, April, July and October, beginning April 15.

Proceeds will be used to partially repay borrowings under Southwestern Energy’s $4.5 billion 364-day bridge term loan facility.

Southwestern Energy is a Houston-based independent natural gas and oil company.

© 2015 Prospect News.
All content on this website is protected by copyright law in the U.S. and elsewhere. For the use of the person downloading only.
Redistribution and copying are prohibited by law without written permission in advance from Prospect News.
Redistribution or copying includes e-mailing, printing multiple copies or any other form of reproduction.